Buy Buy Beacon Hill?

There are a lot of good reasons to live in Beacon Hill, where I currently reside.

• It’s dog-friendly. My neighbors love that silly mutt of mine.
• It’s T-able to pretty much anywhere. I live within 1 of EVERY line. Even the ones I never take. Like, say, all of them. Because…
• It’s totally walkable. I walk to work, dates, dinner, the gym, and playtime. Love it all.
• It’s pretty. Y’know, if you like cobblestones and trees and sidewalks and old buildings and gold domes and stuff.
• It’s quaint. Which is a nice way of saying…

DOWNSIDE:

It’s totally tiny. Also, totally pricey. And if you’re like the Buying In Boston auteur (read: ME), you’ve got an eye on your savings (but not on the consistency of your blogging.)

 

What does this mean? It means that before I start shopping for homes to own, I’m going to start shopping for apartments to rent. That’s right, kiddos — I’m ready to bid adieu to my favorite neighborhood in town.

Where to?

Back to Buying

Hello, friends!

Buying in Boston took a hiatus this summer but we wanted you to know that we WILL be coming back soon. In the meantime, let us know: what do you want to know about Buying In Boston? As always, share us with your friends. If you’d like to contribute, we’d be glad to have your input. Moreover, we’re always open to initiative partners, so if you own a real estate-related business, we’d love to hear from you!

Yours truly,

The Budding Buyer

Love to Live At: Baker Chocolate Factory, Dorchester

If there’s one thing I love, it’s real estate listings.  If there’s two things I love, it’s real estate listings and historic properties.  Which makes Boston house-hunting a dream!

One thing I saw a lot of when I lived outside of Boston was repurposed mills.  New England’s industrial revolution led the nation, but now most of Boston’s industry is in innovation, not production.  As a result, there are a few places that aren’t traditional ‘residential zones,’ which I think are really neat.  Historic space, loft-style units, huge windows, exposed brick, access to highways and waterways, community living… it all sounds awesome.

Dorchester’s Baker Chocolate Factory condos fit the bill.

Historic. It's even in black & white!

Lots of windows!

Looks accessible to roadways and waterways.

Plus, check this little bit of Boston history:  they really did make chocolate there!

In 1765 John Hannon, with financier James Baker, began making one of the first chocolate products in America, in a saw mill powered by the Neponset River, just outside Boston inMilton, Massachusetts. A few years later Baker bought out Hannon’s share of the business and created the first products known as Baker’s Chocolate. James Baker, and later his son Edmund, expanded the business, and Edmund moved it across the river to Dorchester. But it was not until the late 19th century, under the leadership of Henry Pierce, that Baker’s Chocolate became the brand consumers and collectors still recognize today.  (Source.)

Anyone have any advice on the Lower Mills neighborhood within Dorchester?  Anyone here live at the Baker Factory?  I want to know what you think!

Drop and Give Me 20.

Last week, I felt like pretty much every online calculator seemed to suggest that I bankrupt myself in buying my first home.  Thanks again, Internet!

One of my readers, though, felt differently.

Rich Rosa says:

April 5, 2011 at 10:41 am

Very few first-time home buyers put down 20 percent at closing. In fact, FHA loans can be had for as little at 3.5 percent down. MassHousing, which is a great alternative to FHA financing, will allow a 3 percent down payment by someone with a very good credit score. Mortgage insurance, which is required when you don’t put down 20 percent, is less expensive with MassHousing.

I had no idea!  Of course, why would I have any idea, when everything I know about buying a home comes from my parents’ homebuying — and they always had the 20% — and reality television — where they often gloss over the money parts.

I knew I’d heard some bits and pieces on the news lately about the 20% down being a hot issue, especially in light of the housing crisis over the past few years.  A quick google told me I wasn’t imagining it:  20% down is a point of contention in Congress.

At least three agencies—the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency—back a proposal to require home buyers to put down at least 20% of the sales price in order to obtain one of these “qualified residential mortgages.” One proposal would also require borrowers to maintain a 75% loan-to-value ratio for refinances, and a 70% loan-to-value for cash-out refinances in which the borrower refinances into a larger loan, according to people familiar with the matter. (Source.)

If that goes through, that’ll make a big difference in what I can buy, essentially bringing me back to my original plan of coming up with the 20% before I make a move on finding a place.

Any experts in the field want to educate me?  Do I need 20% down?  If this proposal passes, will it change what I need?

Places to Go and People to Be

Boston is a city of neighborhoods.  Each neighborhood carries its own population, priorities, and presuppositions.  Just check out this blog post from a Boston Redevelopment Authority blog: everyone has something to say about where they live and even more to say about where they don’t.

Last week, I was at a networking event downtown.  A few new acquaintances introduced themselves and, in doing so, shared their neighborhoods.

"Nice" Dorchester?

“I live in Dorchester,” one told us, then pausing for a moment.  ”But, like, nice Dorchester.  There are all these gorgeous Victorian homes around me.  It’s stunning, it doesn’t look like Dorchester at all.”

Another, she told us, was renting in Back Bay.  ”But nothing too fancy, just a studio.  It’s all in the commute — I have a 4 minute walk to work.”

The third rented in South Boston, had been there since college.  He still lived with all of his college roommates in a giant bachelor pad.

The fourth had just purchased a home near Fenway through one of the city’s affordable housing programs.  He didn’t specify that, though: doing so would have outed his annual salary to be under $77,000.  It wasn’t until he was pressed for his street address that that detail came out.

Everyone, it seemed, was a little defensive about where they live.  I certainly am: I often mention my nearly kitchen-less apartment within walking distance of the Common.

Where we choose to live says a lot about who we are, whether we like it or not.  Thanks to online tools like Zillow, friends can figure out the value of our new homes with just a few keystrokes.  Suddenly, our once-private net worth becomes very public.  Street-facing, in some cases.  We are categorized by what we can afford, by where we choose to spend it.  If I lived in a $350,000 one-bedroom Beacon Hill condo or a $350,000 three-bedroom in Roslindale, does that make a difference in who I am?

I’d like to think no.  But in practice, I believe that decision reflects on who we see ourselves as.  The community with which we choose to associate.  How can I figure out in which community I belong?  Probably by spending time in them.

Any reader want to show me around his or her neighborhood?  I’d love a tour!

Location, Location, Location

Finance Fix-it Friday: How I Saved My Savings

In Tuesday’s post, I did some fuzzy math to find out how much home I can afford.  While I found the math to be a little troubling, it’s worth noting that I came into the equation with some predetermined facts and figures.

One of those numbers was a down payment of $22,000.  This number was an estimate of how much someone in my bracket might have in the bank.  If you’re loaded down with loans, debt, or other expenses, it may not be true for you.  The number was determined after asking a few friends and colleagues what they had in the bank, so it’s not exactly what I have saved up either, but I think it’s a nice number.

How can you save $20,000?  Not overnight.  Forget what years of Brady Bunch reruns have taught you; sit-coms lie. Barely-employed waitresses don’t own 3-bedroom Greenwich Village apartments and when you decide you need $20k, it’s pretty unlikely that a contest will be announced with a grand prize of $20,000 rewarding whatever amazing talent it is you have.  Plus, even if the Bradys were right, there’s 8 of them!  That’s $20k split 8 ways.  Nice try, TV.

I built up my savings the only way I know how: by keeping money out of my own pocket.

I’m in my late 20′s.  I live in a great city.  I was once a regular in 3 bars/restaurants at the same time.  What can I say?  I waste a lot of money on food and drink and entertainment.  (I like to call it “investing in my community.”)  The easiest way for me to restrain myself was to simply put the money where I couldn’t spend it.

Here’s a few easy steps:

1. Carry cash. When you’re handing over $20s, they seem bigger than handing over a card.
2. Stop bringing credit cards everywhere. When you run out of $20s, don’t have a card waiting in your pocket!
3. Head yourself off at the pass. Open a savings account at the bank where you do your checking.  Get direct deposit of your paycheck and start an auto-deposit into savings.  You can still access the money in your savings, but it’s harder to just spend it.  (Make sure you don’t get a debit card or checkbook with that savings account — you want this to be difficult!)

Personally, I started carrying cash last week.  So, I’m new to the cash-not-cards game.  That said, I find myself spending less money because I can see those little green pieces of Crane stationary as I hand them to a cashier.  So hard to say goodbye to a handful of presidents!

As for the direct deposit, I’m in my second year of depositing a portion of my paycheck right into a money market account at Sovereign Bank.  I can see it if I log into my account, but I can’t take it out of an ATM and there’s at least a day to transfer.  Works if I mess up my week’s spending and have to move money around to pay rent, but keeps me from moving dollars to buy drinks.

I started out saving 20% of my paycheck.  When I moved to Boston, I got a raise.  I upped my savings to 25%.  After the holidays, I decided I could do better.  Now I’m putting 30% of my paycheck into my savings.

Yes, it sort of stinks.  There are times when all I want is to buy a plane ticket somewhere warm or purchase a killer pair of boots or pick up the tab at happy hour.  Those feelings, though, are fleeting.  Watching my savings grow seems to hold me over longer — I totally get a self-control high.  And I can still buy the boots or the plane ticket or the drinks.  Just not all at once.  Not all on the same payday.

I’ll keep you posted in the future on how else I’m working to fix my finances.

What do you do to  keep your savings, spending, and credit rating in check?  I’d love to hear your ideas.

Thoughtful Thursday: City Limits

There are 195 countries in the world.  I chose the United States of America.

Hello, USA.

There are 50 states in the country.  I chose Massachusetts.  (Which, FYI, is a Commonwealth.)

Ah, the Commonwealth.

There are 351 cities and towns in Massachusetts.  I chose Boston.

Okay, it looks a LITTLE different now.

I didn’t grow up in the city.  I didn’t even grow up in the suburbs.  I wouldn’t even call it an exurb!  My hometown is what the Massachusetts Legislature calls a ‘Gateway City.’  (No connection to Wonder Woman’s hometown.)  Under Massachusetts state law, Gateway Cities have a population between 35,000 and 250,000, an average household income below the state average, and an average educational attainment rate below the state average.  Most of these communities are former industrial centers.

Many of my hometown friends still live in my hometown.  A lot of them are married, have children, own homes.  They aren’t clamoring for available apartments, worrying about who lives above or below them.  They’re in detached, single-family homes, not cramped one-bedroom units.  Walk-in closets instead of pop-up Target specials.  Kitchen islands, not a kitchen in a closet.  I will not be able to afford a lot of these things when I buy my first home in the city.  That, friends, is a City Limit.

City Limit. Literally.

House parties, backyard barbecues, and attached garages are probably out of my price range.  Another City Limit.

What if I decide to have children?  Most people I know who grew up in the city didn’t attend public schools.  After reading a recent Boston Globe article about the public school lottery system, I understand why a lot of parents might be uncomfortable with putting their kids in the school system.  Personally, I cherished my public school education.  I attended a private college and I found the atmosphere stifling.  I didn’t feel that way at my high school.  There are a number of schools in Boston.  Some are good, some are bad.  Would I want my children at one of those schools?  Potential City Limit.

When I first lived in Boston, my apartment was robbed.  Cash, jewelry, and electronics

were taken from my then-roommate and me.  The jewelry was mostly of sentimental value; I lost items I can never replace.  I wasn’t home for the robbery, thankfully, but it left me feeling nervous and anxious for weeks.  I consider Boston a safe city, but I know that’s not true in every neighborhood.  I don’t know if I can afford the home I want in a neighborhood that will make me feel safe.  That’s a City Limit.

I have a car.  I park it on the street outside my door.  Pretty convenient!  Mostneighborhoods in the city are not car-friendly.  Am I ready to say goodbye to my beloved car?  Walk to work in the rain and snow?  Wait for the MBTA?  City Limit.

So long, savings.

Of course, 50% of life’s guarantees — taxes — are going to be higher in a city.  (And I guess death, too, if you look back to my crime and safety concerns!)  Taxes are higher, cost of living is higher.  Milk costs about $5.25 per gallon next to my apartment.  Not cool.  City Limit.

Clearly, there are a lot of reasons not to move to the city.  And yet…. I still want to be here.

What do you hate most about city living?